The deregulation of the airline industry inevitably meant that substantial changes would have to be made by Aer Lingus and all other airlines. Clearly, no adequate response was taken by Aer Lingus, and the luxury of profits from ancillary activities was used to submerge the true health of its core airline business. This is the reality and we have to decide here over the next number of weeks whether we are fighting to save an airline industry or some hotels outside this country. In my view we must save the core airline business.
I want to be unequivocal in stating that I believe Aer Lngus has an important future in the aviation industry. It is absolutely essential for the economic welfare of this country that Aer Lingus be restored to viability and health. But it must also be a commercial and efficient operation which can survive in the fiercely competitive, international open-skies era of air travel which now obtains.
To regard Aer Lingus as an operating airline similar to much larger mega airlines like British Airways or Lufthansa showed a clear lack of reality and flawed judgment by those who managed the company. Management should long ago have sought to get the scale of its operations, overheads and manning levels down to the appropriate level of the medium sized but very important airline that Aer Lingus is. Instead it was obvious that certain management people indulged in virtual empire building. Take 1991 for instance, when the financial problems of the airline were already clearly apparent. That was the year of the Gulf War and the worldwide downturn in the aviation industry. However, whereas other airlines were battening down the hatches and retrenching, Are Lingus in that year recruited an extra 1,370 workers, which saw its wages bill soar by over £40 million and in that year too they spent a further £170 million buying new aircraft.
The company simply cannot continue without major readjustments nor can it continue to accumulate losses of up to £100 million a year and sustain the burden of accumulated losses of over £500 million. That is why the formulation of our comprehensive national aviation policy is of such importance. But it must be a policy that strikes a fair balance in the interests of all regions in the country and it must also take into account the role of various agencies like Aer Rianta, Bord Fáilte, the regional airports, SFADCo etc.
Aer Rianta's role must be part of the national aviation stratgey. I was somewhat dissappointed by the Minister's outline of what he termed the national aviation strategy and that no reference was made to Aer Rianta's important role in that regard. There is no point in Aer Rianta being an extremely profitable company while Aer Lingus, its main user and contributor to those profits, is sustaining such huge losses. The cost structures that Aer Rianta imposes on all airlines using Irish airports will have to be considered in the context of an overall review. The number of incoming passengers to Ireland must be increased. The cost of access to Ireland is a crucial factor in the wellbeing of our tourism industry as well as the development of our business sectors in general. Therefore, Aer Rianta must be taken into account in the formulation of a comprehensive national aviation policy.
Another aspect which the Minister did not take into account yesterday was the development of our regional airports. As the Minister is aware, large allocations of Structural Funds have been poured into those airports and money has been raised also by ordinary citizens to support regional airports. We now have some fine regional airports strategically located throughout the country. Yet, it seems that, having built those important assets, no policy to develop those airports has emerged from the Minister's Department.
This is a disgraceful and inadequate response to those regional airports. The suggestion by the Irish Airline Pilots Association that a separate and autonomous division should be developed within Aer Lingus to deal with the regional airports should be carefully examined. I am not convinced it is the way forward but I believe it is something that should be considered in the context of maximising our national assets.
I want to make the point that only this week we saw in my area a new departure in Waterford Regional Airport with the commencment of flights by Manx Airlines from Waterford to Stansted and hopefully there will be further developments with a service from Waterford to Manchester. I sincerely hope that Aer Lingus is not once again going to see those developments as a threat to its existence. Those developments are surely complementary and should be seen as such and a vital development for both our aviation and tourism industries.
The Minister did not refer in his speech last night to the freight side of the airline business, which is a very important part of the aviation business. It seems that, with the disappearance of customs clearance posts within the EC, a great opportunity exists to develop a major clearing centre for freight into Europe from various parts of the world. Dublin is ideally placed to exploit this opportunity and would have the capacity for a substantial operation in this area. I realise that poses other questions down the line because of the way most major international carriers split passenger and freight carrying over long haul distances, particularly in 747s as they travel around the world. It raises the question of other regional policy issues here. The issue of regional policy over national policy must also be considered in the context of developing a type of hub in the freight industry, which we have disgracefully failed to do. The result is that we have seen Manchester blossom to the detriment of Dublin in the passenger end of business over the past number of years. This is something I regret and, indeed, hope will never occur in the context of the possibilities that exist in the freight industry.
